5 Tax-Efficient Side Hustles That Could Add $500 a Month in Retirement
For millions of retirees, retirement income rarely stretches enough. Social Security replaces only about 40% of pre-retirement earnings for the average worker, leaving many looking for ways to fill the gap without taking on a full-time job or getting a surprise tax bill.
The good news is that there are several side hustles for retirees that come with built-in tax advantages. Finance experts point to a few realistic side gigs that could bring in $500 or more per month, depending on how much time retirees are willing to put in.
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1. Consulting and Speaking
Your professional experience can be one of your most valuable assets in retirement. You can make money through consulting, coaching, speaking engagements and subject matter expert work, without having to commit to a traditional part-time job.
“Many of my clients are medical professionals," said Aaron Durden, founder at FourWord Financial. "As their careers wind down, they find their experience and knowledge are valuable assets that convert well into speaking engagements, offering their services as subject matter experts on certain projects or coaching young professionals."
Durden suggested setting up a simple website listing your contact details, the kind of opportunities you’re looking for and relevant work experience. Depending on how you structure your business, you may be able to write off legitimate expenses, lowering your taxable income.
2. Pet Sitting
If you love animals, pet sitting can be a flexible way to make some extra money. Platforms like Rover allow you to select which bookings you take, making it easier to work around your retirement schedule.
"If you have good space for it, you can have multiple dogs overnight and deduct the cost of maintaining any dedicated space," said Kathy Kristof, founder of SideHusl.com. “In addition, your expenses for dog food, toys and other amenities to support your business are fully deductible.”
Kristof added that walking dogs comes with other benefits such as helping you stay active and potentially lower medical costs in the long run.
3. Armchair Consulting
Retirees don’t have to leave the house to cash in on their experience. Respondent and Rare Patient Voice are two examples of platforms that pay people to provide their input on business practices and disease management, respectively.
"The income is taxable, but any expenses you might have to create that income are fully deductible," Kristof said. “For instance, if you dedicate one room in your house as a home office where you exclusively do work, you can deduct all the costs of operating that portion of your home, including utilities and maintenance.”
4. Ride-Share Driving
Melanie Musson, a finance expert at Quote.com, said ride-share driving can be a good fit for retirees in the right location.
"It's not for everyone, and it's not lucrative everywhere, but if you love meeting new people and driving, and you live somewhere with a high cost of living and high demand, you could make a decent supplement to your retirement income," she said.
Since Uber drivers are independent contractors, taxes aren’t automatically withheld. Musson recommended budgeting for quarterly payments once you establish a routine.
5. Serving Samples at Costco
If you want the simplicity of a traditional job, serving samples at Costco can generate a nice little portion of side income without the quarterly tax filings.
"Because you have an employer with this job, you can have estimated taxes withheld from your paycheck, so you don't need to pay quarterly taxes,” Musson said. “You'll just do the usual tax filing before April 15th.”
You’ll still report the income when you file your annual tax return, but having taxes withheld from each paycheck can simplify paying the tax bill.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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